Seòmar agus comataidhean

I was trying to put a positive spin on what is a depressing situation, as you have pointed out.

I have another couple of points and then I will open the questioning up to colleagues.

The Institute for Public Policy Research has said that there should be

“a root and branch review of the tax system ahead of the 2024-25 Scottish budget to examine reforms to rates and bands, and how local tax raising powers could be used to address wealth inequality in Scotland”.

Do you have a view on that?

Thank you. I am pleased to say that our remaining committee colleagues, John Mason and Ross Greer, have now joined us.

Your latest outlook goes on to talk about higher borrowing pushing underlying debt

“sharply, from 84.3% of GDP last year to a 63-year high of 97.6% in 2025-26.”

Of course, your analysis also predicts that gross domestic product will contract by around 2 per cent. You touched on one of the main concerns around debt when you spoke about the impact on householders of mortgage rates going up. In terms of UK debt, however, you say that the

“near tripling of interest rates since March means the shares of revenues consumed by servicing that debt rises from under 5% in 2019-20 to 8.5% in 2027-28, leaving the public finances more vulnerable to future shocks or swings in market sentiment.”

What does that mean in cash terms? The UK economy has more than £2.2 trillion in GDP, so what are we talking about as the economy grows after the recession ends? What are we talking about in cash terms? If servicing that debt rises by 8.5 per cent in 2027-28, what will the debt payments be now and in 2028?

Yes, and people who are on benefits are likely to be hit by fiscal drag, are they not?

What would that mean in cash terms?

Ross Greer has a wee supplementary question.

How much is the UK forecast to be paying in debt interest in 2027-28?

I am thinking about the impact that you think those measures will have on the wider economy, not the amount that is paid in bonuses, which is not necessarily significant in itself. What impact will those measures have on how other people perceive their position when asking for pay increases, and on feeding the view that certain people in society are favoured over others, which makes other people feel that they should get the pay rises that they deserve?

What about the plan to address most of the difficulty with the debt after the next general election?

You have been quite optimistic about the growth in Scottish income tax receipts over the next few years. It looks like solid growth of about 25 to 30 per cent. Will that come mostly through fiscal drag, economic growth, or a combination of the two? Where does the balance sit?

Touching on energy, your outlook says that

“a rapid end to Russia’s invasion of Ukraine that stabilised energy markets and lowered prices”

would be positive and reduce inflationary pressure. However, there is no sign of that happening in the foreseeable future. From what I can see, the situation seems to be a stalemate. If that conflict continues, will gas prices stabilise and reduce as we go forward and as countries look for a way around the problem?